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The magazine, which tracks price movements in 21 countries, said years of dizzying ascents were coming to an end for much of the world. But its chart showed NZ is bucking the trend.

The magazine rated our house prices compared to rents and incomes.

Compared to the amount of rental income our houses generate, we rank second most expensive in the world; NZ houses are 66 per cent over-valued, behind Canada. When compared to the disposable incomes of New Zealanders, our houses are 22 per cent over-valued - sixth on the list.

The average figure based on the two comparisons puts our houses in fifth place at 44 per cent over-valued. New Zealand sits behind Hong Kong, Singapore, Belgium and Canada on this measure.

The Economist found house prices fell in 12 of the 21 countries tracked and continue to plummet in Ireland. New Zealand prices were up 3.3 per cent compared to a year ago.

After dropping by a third from their 2006 peak, prices in America now stand at 19 per cent below fair value, the magazine found.

ASB chief economist Nick Tuffley said house prices here had stayed high compared to incomes and would likely continue to rise.

"We may look like we're over-valued and high compared to other countries. We're still likely to see in the short term a little more house-price pressure coming through. We don't have an oversupply of housing in general and we have some fundamental supply constraints in places like Auckland and Christchurch."

Barfoot & Thompson managing director Peter Thompson said house prices here were set by a free, open and transparent market.

"It's what a person is prepared to sell for and to buy for," he said. "I admit it's making it harder for people to get into property. Getting more properties on the market will stabilise it. We're coming into spring so we might start seeing that."

Last month's Real Estate Institute data showed 5907 dwellings sold, 20 per cent up on July last year. Turnover is rising and now stands at 69,222 sales for the past year, the highest total since February 2010.

Last week, a two-bedroom Sandringham house valued at $720,000 fetched $1.1 million at auction. The 1940s weatherboard house at 23 Watea Rd surprised listing real estate agent Christine Wooding at Barfoots. Expectations were more around the mid-$800,000s, she said.

Developers bid against one another for the property, which is on a section of more than 800sq m. She predicted townhouses would be built there.